How An Unknown Industry Could Save Over $1.8 Billion In Wasted Natural Gas

Can a little-known, fledgling industry make the oil and gas industry more efficient and a little less dangerous to the climate by tackling methane leakage? A new report offers a close look at the “methane mitigation industry.”

The fracking boom has allowed natural gas to seriously threaten — and in many cases supplant — the dominance coal-fired power generation has held over America’s electric grid. Many people who care about climate change and air pollution have cheered this development because when burned, natural gas gives off less pollution, including carbon dioxide, than coal does.

There are two problems with this narrative. The first is that burning more natural gas does not help the climate picture if it replaces low-carbon, renewable energy that would otherwise be deployed. The second is that methane, the principal component of natural gas, is 86 times better at trapping heat in the atmosphere than carbon dioxide is. And not all extracted methane arrives at its intended destination on the consumer end. A not-insignificant amount is emitted at the wellhead, or while being stored and distributed — seeping past inadequate valves, leaking out of pipelines. The natural gas system is the largest industrial source of methane emissions in the U.S., and those emissions are expected to grow. That’s bad news for a livable climate.

So what can the industry do right now to stop it?

The new report, prepared for the Environmental Defense Fund by Datu Research, takes a deep look at the “new and rapidly emerging methane mitigation industry.”

This is how natural gas gets to your house, and it leaks into the atmosphere at almost every single step along the way.

“This presents an environmental challenge for preventing climate change, and an economic challenge for the oil and gas industry,” says Mark Brownstein, Associate VP of EDF’s climate and energy program. “If we fail to take the steps necessary to reduce these emissions, we’re not only hurting the environment where this development takes place, we’re missing out on the economic opportunity — the jobs — that can help make these communities richer.”

At least 76 companies, many of them small businesses, actually manufacture equipment that helps reduce the accidental or unwanted leakage of methane. These companies employ thousands of people in at least 30 job types in 531 locations, in 46 states across the country.

Many of these companies don’t just specialize in methane mitigation, and others used to be in different lines of business altogether. FLIR, based in Oregon, “originally started as a military contractor making thermal imaging products,” Brownstein told ThinkProgress. “As that work has started to dry up, what they’re finding is that the suite of technologies that they have can now be used to do this emissions detection work.” Thermal imaging doesn’t just pick up warm bodies, it also can find methane gas, which is colorless, odorless, and hard to otherwise detect. Accordingly, FLIR “has become a world leader in the infrared detection industry.” Another business, Heath Consultants Incorporated, uses laser spectroscopy to detect leaks around both upstream and downstream operations.

But not all of the companies in the methane mitigation industry focus on detecting and repairing leaks. Tulsa-based Tescorp, for instance, designs custom emissions capture, handling, and storage systems for oil and gas producers that would otherwise just vent or leak their product during routine operations. When oil or gas is stored in a tank, the gases vaporize and collect near the top — they are usually vented or flared. But they can be captured to be used in an on-site generator or compressed into a sales pipeline using a “vapor recovery unit.”

Other manufactures specialize in valves, seals, pumps, and rods that keep more of the pressurized gas — which wants to escape, often violently so — inside gas operation systems. One type of pump, normally pneumatically driven by pressurized natural gas that is vented once it is used, can instead be powered by solar panels, potentially saving the industry billions of cubic feet of gas each year.

The process of fracking itself can be made to waste less methane by using reduced emissions completions (RECs). After the fracking fluid is sent down into the well to fracture the rock, a mix of gas, water, sand, and chemicals comes back up. While dealing with the wastewater comes with its own set of issues, many companies just let the initial bursts of methane vent into the atmosphere, but REC equipment can be installed to separate out the gas into the pipeline going to market.

Many of these technologies pay for themselves very quickly in saved natural gas. And each year, the report’s authors point out, the oil and gas industry loses $1.8 billion in wasted or leaked methane from a variety of emissions sources. It is easy to wonder why a natural gas company with the goal of producing and delivering as much gas as possible, as efficiently as possible, would just allow significant leaks of their product into the atmosphere.

“A number of the reduction opportunities have a net payback, but many don’t,” Brownstein said. Some of these technologies have existed for years, but have not been universally adopted.

Absent a price on greenhouse gases or direct regulation of methane leaks in the oil and gas industry, companies often ignore the externality of wasted gas if the loss is smaller than the gain of leaving that well as-is — they can earn higher returns drilling the next well.

“To fully realize the economic and environmental benefits of stopping these harmful and costly methane leaks, federal and state regulators need to put in place commonsense requirements to detect and fix the leaky infrastructure,” said Greg Dotson, Vice President for Energy Policy at the Center for American Progress.

EDF’s Brownstein told ThinkProgress that regulations will cut emissions and spur an industry that provides a lot of high-quality jobs to Americans. “The only way we are going to get a handle on these emissions is if we have a set of regulations that put in place a level playing field,” he said. Some producers find it in their interest to address these leaks, and some do not.

It’s not clear how far the EPA is going to go on regulating methane under the Clean Air Act. They will likely address control requirements to new wells, but there is a significant amount of leakage from existing wells, so people like Brownstein are looking for the agency to extend regulatory action to existing wells. Currently, the U.S. requires companies to control gas leakage as they finish drilling a new well, but not methane leaks from oil wells that have natural gas mixed in, known as “associated gas production.” Far too many wells are “associated” for them to be ignored under a policy hoping to address methane leakage rates. Some states, like Colorado and Ohio, already require this, but the U.S. as a whole does not.

This idea, that natural gas can be a part of a low-carbon economy if regulations can shut down leaks, does present a problem if increasing natural gas use in the electricity and heating sectors replaces renewable, low-carbon energy that would have otherwise come on-line. Brownstein says while it’s “no question” renewable energy has to play a larger role, “what this is really about is being able to say that whatever percentage of natural gas we continue to use, we can no longer be content to allow leakage to take place, and we’re taking steps to minimize the carbon footprint of this industry.”

Cornell environmental engineering professor Anthony Ingraffea has studied methane emissions for years. “Everyone knows we are going to need gas for forever, but we just don’t need it for stupid uses like burning it for energy — we need it to make things,” he told ThinkProgress.

“In that sense, it would be useful to fix the leaks.” Yet compared to the amount used for heating and electricity, that amounts to about a third of U.S. usage right now: “that’s miniscule.” Regarding the report on methane mitigation, Ingraffea said that EDF “painted themselves into a corner where they have to justify a natural gas policy before they understood the science of methane emissions.”

“When we wrote our paper in 2011, we estimated that the leak rate was much much higher than anybody ever thought, including EDF. So EDF launched its campaign to go and monitor emissions rates.” Now, he says, their estimates admit that Ingraffea’s team was right.

He says that fixing the massive, sometimes ancient natural gas infrastructure of the U.S. “will take too long and too much money.”

“That they are offering up jobs fixing leaks as opposed to jobs building the next generation energy infrastructure is insulting to American workers,” Ingraffea said.

Doing nothing about methane leaks, especially when they represent wasted billions and significant greenhouse gas emissions, benefits no one. Spending resources on natural gas that would otherwise go to renewable energy production commits the world to decades of additional emissions. The one common, unifying thread here is that putting a price on carbon would make emitters want to stop emitting so wastefully and encourage low-carbon energy production.